100 Market based management models and diagrams for your powerful business presentations. Content: Powerpoint, presentations, business, slides, diagrams, charts, Custoner Value, Shareholder Value, Market-based-Strategies, Market Potential, Value Creation, Economic Benefits, Market Segmentation, Targeting, Competitive Advantage, Industry Analysis, Prisoners Dilemma, Switch Cost, Pricing, Skimming, Penetration, Channel Management, Push-Pull, Portfolio Analysis, Life Cycle Analysis, Market Performance, Sales Forecast, Four P's, Competitor Analysis, Transaction Marketing, Consumer Behavior, Mass Customization, Cluster Theory, Value Chain, Marketing Information, Brand Management, AIDA, Marketing Plan, SWOT, New Age Pricing, Pruducer/Custormer Gap, Mass Production Download these diagrams on http://www.drawpack.com (try our free membership offer)

1. Market Based Management ... 100 Slides Powered by www.drawpack.com . All rights reserved. Generic product Expected product Augmented product Potential product Core benefit

2. Key Words ... Customer Value – Shareholder Value – Market-based-Strategies – Market Potential – Value Creation – Economic Benefits – Market Segmentation – Targeting – Competitive Advantage – Industry Analysis – Prisoners Dilemma – Switch Cost – Pricing – Skimming – Penetration – Channel Management – Push-Pull – Portfolio Analysis – Life Cycle Analysis – Market Performance – Sales Forecast – Four P’s – Competitor Analysis – Transaction Marketing – Consumer Behavior – Mass Customization – Cluster Theory – Value Chain – Marketing Information – Brand Management – AIDA – Marketing Plan – SWOT – New Age Pricing – Producer/Customer Gap – Mass Production

3. How to Underwhelm Customers and Shareholders Poor Understanding of Customers and Competition High Cost of Customer Retention and Acquisition Sporadic Business Unit Profit Market Share Instability Accounting Maneuvers Drive Financial Results Excessive Customer Turnover Me-Too Customer Value Pressure for Short-Run Results Unfocused Competitive Position Stagnant Shareholder Value

4. Marketing Knowledge and Market Orientation Bottom High Middle Marketing Knowledge Market Orientation Score (0-100) 60 90 100 70 50 80 Business Profitability Customer Retention Marketing Knowledge Market Orientation

5. Fundamental Market-Based Strategies and Profitable Growth Strategies to Grow Market Demand Net Marketing Contribution Market Demand Market Share Revenue per Customer Variable Cost per Customer Strategies to Increase Market Share Strategies to Grow Customer Purchases Strategies to Increase Marketing Efficiency Strategies to Enter or Exit Markets Strategies to Lower Variable Cost per Customer Marketing Expenses = X - X -

6. Sales-Based vs. Market-Based Organizational Structure Mining Marketing Unit Construction Marketing Unit End-User Market Mining Mining Dealers Market-Based Structure Earthmoving Equipment Division Direct Sales Construction Dealers End-User Market Construction Earthmoving Equipment Division Sales-Based Structure Sales Organization Dealer Sales Mining Dealers End-User Market Mining and Construction

7. Maximum Market Potential and Current Market Demand Maximum Number of Potential Customers Developed Market Current Market Demand Not Affordable Lack Benefits Unable to Use Not Available Not Aware Untapped Market Opportunity

8. Customer Adoption and Market Development Market Development Gap Late Majority Early Majority Early Adopters Laggards Innovators Early Market Mainstream Market Full Market Development 100% 60% 80% 20% 40% 0%

9. Economic Benefits and Value Creation Amazon.com lowers purchase price with the on-line purchase of books. Usage Costs Maintenance Costs Ownership Costs Disposal Costs Price Paid Acquisition Costs American Hospital Supply reduces a hospital’s cost with a computerized customer order program. Sealed Air reduces labor cost in packaging with AirCap. Saturn lowers the cost of repair and insurance through module product design. GE Capital works with customers to create affordable ownership. Rohm-Haas’s Kathon MWX cuts cost of disposal of machine fluid waste in half. Total Cost of Purchase

10. Fundamental Forces That Shape Differences in Customer Needs Consumer Market Customer Needs Demographic Forces Usage Behaviors - Quantity - Time of Use - Personal - Social - Frequency of Use - Age - Income - Marital Status - Education - Occupation Lifestyle Forces - Attitudes - Values - Activities - Interests - Political View

11. Fundamental Forces That Drive Differences in Business-to-Business Customer Needs Business-to-Business Customer Needs Firmographic Forces Usage Behaviors - Application - Quantity - Time of Purchase - Frequency of Purchase - Users - Number of Employees - Sales Volume - Number of Locations - Years in Business - Financial Situation Business Culture - Business Sophistication - Growth Orientation - Innovativeness - Technology - Decision Making

12. Market Segmentation of the Small Business Market Growth-Oriented Entrepreneurs Core Business Need Ways to invest and grow Firmographics Medium size More sophisticated Higher in education Ongoing financial plan Purchase Behavior Products that enhance productivity High revenue per customer Willing to buy value-added solutions Value Proposition Solutions that help you grow your business Cost-Focused Sustainers Core Business Need Ways to continue and save Firmographics Small in sales / employees Less sophisticated Lower in education Limited or no financial plan Purchase Behavior Products that lower cost Low revenue per customer Confused by value-added solutions Value Proposition Solutions that saves your business money Growth-Oriented Cost-Focused

13. Forces That Shape Segment Attractiveness Segment Attractiveness Market Growth Market Access Competitive Intensity - Customer Familiarity - Channel Access - Company Fit - Market Size - Growth Rate - Market Potential - Number Of Companies - Ease of Entry - Substitutes

14. Segmentation Hierarchy: Mass Market to Mass Customization Strategies Mass Market Approach Small Segment Strategy Large Segment Strategy Adjacent Segment Strategy Niche Segment Strategy Multi-segment Strategy Mass Customization Strategy Segment A Segment C Segment A 1 Segment A 3 Segment A 5 Segment A 2 Segment B 1 Segment A 4 Segment B 2 Segment B 3 Segment C 1 Segment C 2 Segment C 2 Segment A Segment B Segment C Segment A Segment B

15. Competitive Forces That Shape Competitive Position and Profitability Competitive Position and Profitability Industry Forces Competitive Advantage Competitor Benchmarking - Cost Advantage - Quality Advantage - Marketing Advantage - Market Entry/Exit - Buyer/Supplier Power - Substitutes/Rivalry - Competitor Intelligence - Competitor Analysis - Competitive Benchmarking

16. Industry Analysis: Industry Forces and Profit Potential Industry Forces Barriers to Entry Barriers to Exit Buyer Power Supplier Power Substitutes Competitive Rivalry Unfavorable Low High High High Many Intense Favorable High Low Low Low None None The more favorable the forces that shape a market’s competitive environment, the greater a business’s profit potential Competitive Environment Competitive Environment More favorable competitive environment Less favorable competitive environment Unfavorable Profit Potential Favorable

17. Performance Impact of Price Rivalry and Prisoner‘s Dilemma Hold Price Cut Price 5% Hold Price Cut Price 5% Market Share = 10% Volume = 1 million units Price = $100 per unit Margin = $40 per unit Total Cont. = $40 million Market Share = 12% Volume = 1.2 million units Price = $95 per unit Margin = $35 per unit Total Cont. = $42 million Market Share = 10% Volume = 1 million units Price = $95 per unit Margin = $35 per unit Total Cont. = $35 million Market Share = 8% Volume = 800’000 units Price = $100 per unit Margin = $40 per unit Total Cont. = $32 million Business’s Marketing Strategy Competitor’s Marketing Strategy

18. Major Sources of Competitive Advantage Competitive Advantage Cost Advantage Marketing Advantage Differentiation Advantage - Distribution - Sales Effort - Brand Awareness - Variable Costs - Marketing Expenses - Operating Expenses - Product Differentiation - Service Quality - Brand Reputation

19. Ignition Switch Cost Advantage Due to Scale and Scope Effects Scale Effect Cost per Unit Production Capacity C 1 C 2 Cost per Unit Scope Effect Auto-mobiles Product Breadth Pumps Snow Blowers Lawn-mowers Motor-cycles

20. Product-Price Position, Marketing Effort, and Market Share Market Share Marketing Effort Product Position Sales Force Product Breadth Price Physical Distribution Product Differentiation Retailing & Merchandising Customer Support New Products Service Quality Brand Image Media Advertising Sales Promotion = X

21. Core Elements of Product Management Strategy Product Management Strategies Product Positioning and Differentiation New Product Development Product Line Positioning and Extension Strategies - New Product Sales - New Product Innovation - Development Process - Low Price/Cost of Purchase - Product Differentiation - Service/Brand - Product Line Positioning - Product Line Extensions - Product Bundling

22. Differentiation and Customer Value I Product Differentiation Product Benefits Service Benefits Brand Benefits Total Benefits Total Cost Customer Value Price Nonprice Costs Service Differentiation Product Benefits Service Benefits Brand Benefits Total Benefits Total Cost Customer Value Price Nonprice Costs Brand Differentiation Product Benefits Service Benefits Brand Benefits Total Benefits Total Cost Customer Value Price Nonprice Costs

23. Differentiation and Customer Value II Product Benefits Service Benefits Brand Benefits Total Benefits Derived from Product Position Total Cost of Obtaining These Benefits Brand Differentiation Service Differentiation Product Differentiation Customer Value Price Transaction Costs Low-Price Position Lower Transaction Costs

25. Market-Based Value Pricing Perceived Value vs. Costs Product Benefits Service Benefits Brand Benefits Relative Benefits Relative Cost Perceived Value Price Nonprice Costs Perception Total Cost of Ownership Competitor’s Product Business’s Product Economic Value Price Cost Use Maintenance Acquisition Acquisition Price Maintenance Use

26. Price Elasticity and Performance Price Elasticity Unit Volume Decrease Unit Contribution Increase Sales Revenue Increase Unit Margin Increase Decrease Increase Decrease Decrease Decrease Decrease Decrease Increase Increase Increase No change No change No change Inc/Dec* Inc/Dec* Maximum Inelastic (<-1) Elastic (>-1) Unity (=-1) Hold Price Raise Price Lower Price Raise Price Lower Price * The total contribution could increase or decrease, depending on the level of elasticity and unit margin.

27. Skim Pricing Favorable Conditions Considerable Differentiation Quality-Sensitive Customers Sustainable Advantage Few Competitors Few Substitutes Difficult Competitor Entry Skim Pricing Time Dollars per Unit Price Cost

28. Penetration Pricing Favorable Conditions No/Limited Differentiation Price-Sensitive Customers No Sustainable Advantage Many Competitors Many Substitutes Easy Competitor Entry Penetration Pricing Time Dollars per Unit Price Cost

29. Break-Even Volume for a Given Price Strategy Total Revenue Total Costs Fixed Expenses* * Fixed Expenses = Marketing Expenses and Other Direct Expenses $ Millions 15 30 35 20 10 25 5 0 50 150 100 Break-Even Volume (90,000) 200 Units Sold (‘000) Profit Loss

31. Alternative Customer Channel Systems Manufacturers Direct Channel Systems Indirect Channel Systems Reps/Agents Customer Markets Tele- marketing Direct Marketing Direct Sales On-Line Marketing Reps/ Agents Retailers Wholesalers

32. Message Reinforcement Strategies 1 Gross Rating Points 50 200 250 100 0 150 Pulsing 5 9 13 17 21 25 29 Weeks Ad Awareness 1 20% 80% 100% 40% 0% 60% 5 9 13 17 21 25 29 Weeks 1 Gross Rating Points 50 200 250 100 0 150 Heavy-Up 5 9 13 17 21 25 29 Weeks Ad Awareness 1 20% 80% 100% 40% 0% 60% 5 9 13 17 21 25 29 Weeks

36. Portfolio Analysis and Strategic Market Plans Protect Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage. Grow Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Focus Selectively narrow market focus to profitable segments or niches within a segment in order to capture profits while limiting the resources committed to this market. Harvest Adjust prices and marketing expenses to gradually exit the market while attempting to maximize profits during this gradual exit. Entry Invest to enter an attractive market to establish a desired competitive advantage. This strategy could also require investment to accelerate the growth of a new or underdeveloped market. Divest Quick divestment from a market. When there are no short-term profits to be gained with a harvest strategy, an immediate exit strategy is appropriate. Very Attractive Market Attractiveness Very Unattractive Offensive (Entry) Very Strong Very Weak Competitive Advantage Offensive (Grow) Defensive (Divest or Harvest) Defensive (Protect) Defensive (Protect or Harvest) Defensive (Divest or Harvest) Offensive (Grow) Defensive (Protect / Harvest) Offensive (Grow) Defensive (Protect / Focus) Offensive (Grow) Defensive (Protect / Focus) Offensive (Grow) Defensive (Protect)

38. Product Life Cycle and Offensive and Defensive Marketing Strategies Sales Revenue Early Growth Declining Market Emerging Market Late Growth Mature Market Maturing Market Rapid Growth Offensive Offensive Offensive Offensive / Defensive Offensive / Defensive Defensive Defensive

41. Portfolio Positions and Defensive Strategic Market Plans Very Attractive Market Attractiveness Very Unattractive Very Strong Very Weak Competitive Advantage Harvest or Divest Protect Protect or Harvest Harvest or Divest Protect or Harvest Protect or Focus Protect or Focus Protect

43. A Customer-Based Model of Net Profits Market Demand (Customers) Market Share (Percent) Revenue per Customer Variable Cost per Customer Marketing Expenses Operating Expenses Net Profits (before taxes) Margin per Customer Customer Volume Total Contribution Net Marketing Contribution

44. A Customer-Based Model of Return on Assets Accounts Receivable Inventory Cash Plant and Equipment Return on Assets Fixed Expenses Current Assets Total Assets Market Demand (Customers) Market Share (Percent) Revenue per Customer Variable Cost per Customer Marketing Expenses Operating Expenses Net Profits (before taxes) Margin per Customer Customer Volume Total Contribution Net Marketing Contribution

46. GE / McKinsey Multifactor Portfolio Matrix INDUSTRY ATTRACTIVENESS BUSINESS STRENGTH Invest Manage Selectively for Earnings Invest Invest Manage Selectively for Earnings Manage Selectively for Earnings Harvest or Divest Harvest or Divest Harvest or Divest

47. Market Potential, Sales Potential, and Sales Forecast Market Potential Sales Forecast Total Population Sales Potential

48. The R&D Effort Portfolio MARKET OPPORTUNITY SELECTIVE EMPHASIS LIMITED SUPPORT HEAVY EMPHASIS HEAVY EMPHASIS HEAVY EMPHASIS LIMITED SUPPORT LIMITED SUPPORT SELECTIVE EMPHASIS SELECTIVE EMPHASIS LOW HIGH MODERATE MARKET OPPORTUNITY LOW HIGH MODERATE

49. When to Use a Penetration or Skimming Strategy for Pricing New Products Penetration Strategy Level of Desire in Market High Skimming Strategy Distinctive Not Important Low Not Easy Similar Important Easy Fast Gradual Importance of Price to Market Ease of Duplicating Product Distinctiveness from Competitive Products Return on Investment Objective Dimension

51. Strategy Planning for Product Price Brand Type of brand Individual or family Manufacturer or dealer Product Physical good / service Features Quality level Accessories Installation Instructions Warranty Product line Product idea Place Promotion Target market Package Protection Promotion (or both)

52. Product Classes Consumer products Convenience products Unsought products Specialty products Shopping products Staples Impulse products Emergency products Homogeneous Heterogeneous New unsought Regularly unsought Products Professional services Components Raw materials Accessories Supplies Installations Industrial products Staples Impulse products Emergency products Farm products Natural products Component parts Component materials

53. New-Product Development Process Idea generation Screening Rough ROI estimate Idea evaluation Concept testing Rough ROI verification Development R&D Build model Test in market ROI estimate Revise product Idea evaluation Finalize product Finalize marketing plan Final ROI estimate Start production and marketing plan

54. International Marketing Opportunities Product Promotion Same Adaptation New Adaptation Same Basically same needs, but different incomes and / or applications (street vendor with low-cost hamburgers) Different needs and different incomes and / or applications (hand-powered washing machines) Basically same needs and use conditions (McDonald’s strategy with beer in Germany) Different needs and use conditions (clothing) Same needs and use conditions (McDonald’s usual strategy) Different needs but same use conditions (bicycles)

55. Customer and Competitor Orientations Self-centered Minor Market-driven Customer-oriented Competitor-centered Competitor emphasis Competitor emphasis Major Minor Major

56. Efficiency vs. Effectiveness Thrive Efficient Die quickly Survive Die slowly Strategic management Operational management Inefficient Effective Ineffective 1 4 3 2

57. Approaches to Competitor Analysis Desk Research Databases Market Research Internal Information Industry Mapping Building Competitive Advantage Critical Success Factors Special Competitor Studies Value Chain Analysis Industry Analysis Competitor Profiling Benchmarking

58. Developing the Organization‘s Core Competences Core Competences Existing New Markets Existing New Extending the base What core competences do we need to be developed so that the organization’s current position is best protected and/or extended? Uncharted waters What core competences need to be developed in order to compete in the new and developing markets which offer the greatest future potential? Good housekeeping How can better use be made of the organization’s current core competences? Moving into new areas What new products or services can be developed by rethinking or reallocating the existing core competences?

59. The Nine Price / Quality Strategies Cheap-value strategy Low Price Product quality High 1 4 3 2 9 8 6 7 5 Premium strategy Overcharging strategy Exploitative strategy Middle-of-the- road strategy Above average value strategy High-value strategy Superb value strategy Out-of-step strategy Medium Low High Medium

60. Relationship Between Service Levels and Costs $ Total costs Transportation, order processing and inventory carrying costs Level of customer service Cost of lost sales Cost 0 100%

61. Setting Customer Service Levels $ Revenue from service Distribution costs Service level Increase in costs, sales revenue or profit 0 99 Profit curve Maximum profit contribution 93 %

62. Marketing Excellence Framework Marketing Strategy Supply Chain Branding Quality Strategy Customer Development Product Innovation Manufacturing Business Performance

63. Consequences of Strategic and Tactical Implementation Marketing implementation Appropriate Inappropriate Strategy / tactic Proof Excellent Success Possible short-term success – but ultimately failure Trouble or failure Failure

64. The Transition to RM Emphasis on all six market domains Transaction marketing Relationship marketing Emphasis on customer market domain Functionally based marketing Cross-functionally based marketing

65. The RM Multiple Markets Model Customer Markets Supplier & Alliance Markets Internal Markets Referral Markets Influencer Markets Recruitment Markets

66. Types of Consumer Buyer Behavior Complex buyer behaviour Many Habitual buyer behaviour Dissonance-reducing buyer behaviour Variety-seeking buyer behaviour Involvement Differences between brands Few

67. Appropriate Pricing Strategies Opportunity for value enhancement Low High Skimming strategy Price leadership ‘ Follow my leader’ Penetration strategy Low High Opportunity for cost reduction

68. The Expanded Marketing Mix Product Price People Processes Place Promotion Customer Service

69. The Paradigm of Mass Production as a Dynamic System of Reinforcing Factors New Products Mass Production Processes Low-Cost, Consistent Quality, Standardized Products Homogeneous Market Stable Demand Long Product Life Cycles Long Product Development Cycles R

70. The New Paradigm of Mass Customization as a Dynamic System Feedback Loop New Products Mass Customization Processes Low-Cost, High Quality, Customized Products Heterogeneous Markets Demand Fragmentation Short Product Life Cycles Short Product Development Cycles R Product Technology Process Technology R R

71. Six Types of Modularity for the Mass Customization of Products and Services Component – Sharing Modularity Component-Swapping Modularity Cut-to-Fit Modularity Mix Modularity Bus Modularity Sectional Modularity

72. Product-Process Change Matrix PRODUCT CHANGE MASS CUSTOMIZATION INVENTION CONTINUOUS IMPROVEMENT MASS PRODUCTION PROCESS CHANGE STABLE DYNAMIC STABLE DYNAMIC

73. Product-Process Change Matrix: The Mass Production Axis PROCESS CHANGE STABLE PRODUCT CHANGE DYNAMIC STABLE DYNAMIC MASS CUSTOMIZATION INVENTION CONTINUOUS IMPROVEMENT MASS PRODUCTION

74. Mass-Customized Products: Stable Processes Producing Dynamic Flow of Products PRODUCT 1 VOLUMES TIME PROCESS CAPABILITIES PRODUCT VOLUMES PRODUCT 3 VOLUMES PRODUCT 2 VOLUMES PROCESS CAPABILITIES

75. Mass-Customized Products: Shortening Process Life Cycles PROCESS 1 CAPABILITIES TIME PRODUCT VOLUMES PROCESS 3 CAPABILITIES PROCESS 2 CAPABILITIES ENTERPRISE ENTERPRISE CAPABILITIES AND RESOURCES PROCESS CAPABILITIES PRODUCT N VOLUMES

76. Product-Process Change Matrix: Virtual Enterprise Flow MASS CUSTOMIZATION INVENTION CONTINUOUS IMPROVEMENT MASS PRODUCTION PROCESS CHANGE STABLE PRODUCT CHANGE DYNAMIC STABLE DYNAMIC

79. Management of Industrial Customer‘s Portfolios I For a continuous supply case Existing customer Prospect Structural Attractiveness Structural Attractiveness Customers to be kept without over investing Customers justifying an overinvestment Customers to be kept with minimum investment Customers to be examined in a selective way Prospects to be cultivated with tenacity while expecting an opening “ hot” prospects justifying a strong investment Prospects not to be worked on intensively “ hot” prospects justifying only a limited investment Development possibilities Penetration possibilities

80. Management of Industrial Customer‘s Portfolios II Case of discontinued supply Structural Attractiveness To follow up on a major customer if the deal is not too unfavourable Major opportunity justifying a major investment To decline and not to be followed To grasp an excellent deal if the customer is acceptable Transaction attractiveness

82. The Marketing Exchange Process II Raw materials End user Components Finished product Retailer Wholesaler Upstream exchange Supplier Customer Downstream exchange

83. The Producer – Customer Gap Specialization and division of labour result in heterogeneous supply capabilities PRODUCTION SECTOR Heterogeneous demand for form, time, place, possession utility to satisfy needs /wants CONSUMPTION SECTOR Scattered Many locations CUSTOMERS Consumption usually not at time of production (exception: services) Don’t know what is available from whom, where, when, what price Value goods and services in terms of economic utility and ability to pay Want to consume goods which they don’t own Prefer to buy and consume in small quantities Purchase a broad assortment Clustered Few locations PRODUCERS Time required to bring goods to market Don’t know who needs what, where, when, what price Value goods and services in terms of costs and competitive prices Hold title to goods which they don’t consume Prefer to produce and sell in large quantities Produce a narrow assortment SPACE OWNERSHIP TIME VALUES QUANTITY ASSORTMENT INFORMATION Marketing needed to overcome gaps

84. The Value Chain Value chain of a computer manufacturer Component suppliers Computer manufacturer Retail outlets End users: Individuals, Companies Component Purchasing R & D Marketing Manufac-turing Product Design Make or buy?

86. Market Structure: Actual / Potential Market Potential market (100%) Accessible market (80%) Qualified market (50%) Serviced market (20%) Total population (100%) Actual market (2%) Potential market (100%)

87. Market Segmentation Strategies a) Product variety: no segmentation Need Analysis Program A Program B Program C Program for Segment B Program for Segment A Program for Segment B Need Analysis Need Analysis Program for Segment C MARKET FIRM FIRM FIRM c) Multi-segment marketing b) Concentrated marketing Segment B Segment C Segment A Segment C Segment B Segment A

88. Factors Affecting the Choice of Target Markets Needs / wants of end-users Market size / structure Decision-maker preferences and corporate culture Resources / capabilities of the firm Firm / brand market share, sales projections Competitive activity Political pressures and lobbying Production / marketing, scale economies Choice of target markets

89. The Use of Marketing Information I Marketing Information System Environment Target markets Distribution channels Competitors People Macro-environment Marketing Manager Analysis Planning Execution Control Data Information Accounting system Market studies and research system Marketing models system Accounting system M. I. S. / M. D. S. S.

90. The Use of Marketing Information II Evolution of information needs Product orientation Customer orientation 1960 Personalized target communication Mass media advertising General information Specific information Customized marketing Mass marketing Customer equity 1970 1980 1990

91. The Use of Marketing Information III The Marketing Information Value Chain Data collection and transmission Customer files Diary panels POS scanner Data management Data interpretation = Information Marketing-related models Decision Support Systems E.I.S. DB2 Oracle DB3 Paradox Promoter, ADCAD Conjoint (choice) MDS (position) Expert systems: Salespartner Coverstory Collect Organise Describe Represent Explain Recommend

92. Approaches to the Study of Customer Behavior HOMO ECONOMICUS Rationality: revenue determines consumption level price determines consumption allocation Unlimited needs: utility and satisfaction maximization Perfect knowledge of needs and of products to satisfy them Deterministic choice Product functionality Objective Subjective Product symbolism Degree of involvement Imperfect knowledge, stochastic choice Limited needs: satisfiers Irrational action: needs / wants / hopes, dreams,… Feelings, emotions / unconscious motivations HOMO PSYCHOLOGICUS

93. Group Influence on Buyer Appraisal of Product and Brand Group influence on product category Group influence on product brand Strong Weak Strong Weak automobiles cigarettes beer,wine clothes furniture watches cellular phones instant coffee color TV detergent canned food garbage bags

94. Attitude Based Decision Process: AIDA (Attention, Interest, Desire, Action) Awareness, perception Preference, choice Post-purchase reaction (cognitive dissonance) Desire Action Attention Interest Purchase Yes / No Cognitive Affective Conative

95. The 6 – Step Marketing Plan 1 2 3 budget allocation: product promotion price distribution 4 5 6 Action plan Forecasts Control quantify: costs sales profits market share organization structure measurement tools check frequency => Corrective actions firm market industry competition environment Situation (SWOT) Objectives Strategy sales market share market expansion leadership satisfaction segment – target price / quality product positioning differentiation diversification Marketing Plan

98. Sources of Market Uncertainty What needs might be met by the new technology? Market Uncertainty How large is the potential market? How will needs change in the future? How fast will the innovation spread? Will the market adopt industry standards?

99. Sources of Technological Uncertainty Will the new product function as promised? Technological Uncertainty Will new technology make ours obsolete? Will the delivery timetable be met? Will there be side effects of the product or service? Will the vendor give high-quality service?

100. A Taxonomy of Marketing Situations Based on Technological and Market Uncertainty Better Mousetrap Marketing High-Fashion Marketing Low-Tech Marketing High-Tech Marketing Market Uncertainty Technological Uncertainty High Low Low High

101. New Age Pricing Average Unit Customer Value Amount of Pricing Discretion Average Unit Cost $ Unit Volume

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